Russia seeks ways to protect investors from Crimea sanctions

Ukrainian News
Canan Kevser
05 February 2021, 22:10
Canan Kevser
05 February 2021, 22:10

Russian companies that invest in Crimea could be granted anonymity under new government proposals designed to protect investors from coming under Western sanctions and stimulate corporate activity on the peninsula.

According to the Russian news site RBC, the new bill would allow investors from other parts of Russia to dismiss the usual corporate transparency and reporting requirements. In particular, by keeping their names and details out of publicly available land and business registries - a degree of protection, it hopes, from the prospect of falling under Western sanctions for engaging in Crimea.

Crimea has suffered from underinvestment and requires "extensive infrastructure outlays to boost its competitiveness," according to the assessments by Russian officials.

An explanatory note to the bill claims that while Russia has taken sweeping steps to "taking into account the geopolitical position of Crimea and Sevastopol," the proposals would allegedly "accelerate their socio-economic development and create an attractive investment climate."

But some business experts raised concerns to RBC that the proposals could lead to further corruption, citing a worrying combination of anonymity guarantees and existing support for the peninsula such as low taxes and the ability to secure land rental contracts without a public tender.

Russia illegally occupied Ukraine's Crimea in 2014, causing strict rounds of sanctions from the U.S. and EU which effectively bans firms from operating or investing there. Any Russian company active in Crimea faces being cut-off from the entire Western corporate and financial system, meaning most - including state-owned businesses.